11:57 am, January 18, 2023
Alex Chesterman will step down as chief executive of Cazoo to focus on a new role with the used car dealer.
The founder will assume the role of executive chairman while current chief operating officer Paul Whitehead will become CEO.
Cazoo says the splitting of the roles is ‘customary’ and will allow Chesterman to focus on the ‘strategic direction’ of Cazoo.
In a detailed announcement today the company said it would also be consolidating its shares to bring the share price back into compliance with New York Stock Exchange rules.
Companies have to have a closing share price above $1 for 30 consecutive days and Cazoo has fallen well short of this.
Cazoo says it will update investors on how it plans to do this in ‘the near future’. Shares were trading at 30 cents this morning.
Cazoo announced it will also be closing more preparation centres and customer hand over sites – snapped up in multi million pound deals as the company was on its aggressive growth path.
More jobs are also on the line, said Cazoo. The detail of these changes will be given at the same time as the dealer releases its full 2022 results.
Cazoo said: ‘In the current economic environment we believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximising our cash runway.
‘Our revised FY 2023 plan, approved by the Board of Directors, aims to rapidly improve the unit economics of the business. To enable these improvements, we are resetting our 2023 top line ambitions.’
The used car dealer has reduced the number of cars it says it will sell in 2023 – to between 40,000 and 50,000, from 65,000 achieved in 2022.
In its investor presentation shared before listing, Cazoo said it would be selling 176,000 used cars in 2023 and 58,000 in Europe.
The revised figures are a drastically changed forecast and come after the firm pulled out of mainland Europe completely.
Cazoo called the updated plan issued today a ‘reset’.
It said: ‘In line with the lower unit expectations for 2023 and the current economic climate, we will be making our operational and logistics networks more efficient through the closure of certain of our vehicle preparation centre and customer centre facilities and making further headcount reductions.
‘This plan is in the process of being finalised and we will provide more detailed information at the time of our FY 2022 results.’
The car dealer also warned it will need to raise further capital in the next 18-24 months, but said it had £250m on its balance sheet at the end of 2022.
This looks like it will be diminished further in 2023 as Cazoo predicts it will have £100m left by the end of the year
Cazoo says the changes will help it ‘advance towards profitability’.
The update came along with Cazoo’s financial performance for the final quarter of 2022 and with preliminary figures for the year.
Revenue reached £315m for Q4 and topped £1.24bn for the year.
It said it is now managing to make an average of £600 per car it sells. Industry rivals achieve upwards of £1,500.
Chesterman said: ‘Our new 2023 plan, which includes more modest top line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash as we make continued progress towards our goal of reaching profitability, without the need to raise further funding over the next 18-24 months.
‘Whilst 2022 was a challenging year in many respects, our continued strong growth, notable improvement in unit economics during each quarter and market-leading consumer feedback gives us strong confidence in the long-term opportunity for Cazoo.
‘We also remain on track and on budget with our withdrawal plan from the EU, having disposed of our Italian and Spanish businesses and largely wound down our French and German operations in Q4 2022.’
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